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How Oil Prices Could Collapse

The price of oil plummeted once before and it can do so again — if we play our cards right.

by
Youssef M. Ibrahim

Bio

July 6, 2008 - 12:00 am
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To be sure readers of this column have argued these are capitalist rules — their oil, their move. But globalization demands leveled playing fields, not monopolies. What is sure is that the time for an alternative to oil is now.

And it can break the bank as it did before. Back in 1973 Arab oil producers led by Saudi Arabia imposed a cutoff of oil to the USA and Europe. Prices shot up to the equivalent of $100 a barrel in today’s dollars and we were familiarized with what is known as the global oil crisis. While some menaced war, oil companies took off looking for new provinces and found them — like the North Sea, which started pumping from zero in 1971 all the way up to its six million barrel a day peak of 1999. So much new oil was found elsewhere that OPEC’s share of world supplies dropped to forty percent from nearly sixty percent.

And prices collapsed as a result, until they resumed their climb two years ago.

Wanda knew it and said it too often. That’s the legendary Wanda Jablonski, whose life as a prescient journalist, business editor, and publisher is being grandly celebrated this week with a new book properly titled Queen of the Oil Club, by Anna Rubino.

Reading the book, it becomes clear that we heard it all before but did not pay attention. Although Wanda had a weakness for those oilmen who run the business, she always posed the alternate question. She was so insistent a voice in raising questions about oilmen and their world that they had a less flattering moniker than “queen of their club,” giggling that she was a “buster” of a delicate part of male anatomy.

As you read Wanda’s story and that of the oil she singlehandedly turned from a simple commodity into “black gold” and the stuff of global crises and wars, you can pick up the message: look for the alternative, now.

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Youssef M. Ibrahim, a freelance writer and risk consultant, is a former New York Times Mideast correspondent and Energy Editor of the Wall Street Journal. He can be reached at ymibrahim2004@yahoo.com.
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